Our study examines how a company’s engagement in corporate social responsibility influences word of mouth about the company on Twitter, particularly during a service delay. We use the airline industry as the study context. On the popular social medium Twitter, people post tweets about airline services and raise concerns about service delays when flights are delayed, canceled, or diverted. Drawing on the literature on legitimacy and the halo effect, we argue that a company’s CSR engagement enhances its corporate image, which (...) in turn, influences WOM about the company on Twitter. We predict and find that airlines with better CSR engagement receive more positive word of mouth and less negative word of mouth on Twitter. We also find that service delays reduce PWOM and increase NWOM, with the additional finding that the positive relationship between service delays and NWOM is less strong for airlines with better CSR engagement. We conduct additional analyses to investigate the effects of environmental, social, and governance CSR on PWOM and NWOM. Our study has practical implications in informing companies about the benefits of CSR engagement in relation to public opinion during service delays. (shrink)

This article proposes a way to zoom in on the concept of the social license to operate from the broader normative perspective of contractarianism. An SLO can be defined as a contractarian basis for the legitimacy of a company’s specific activity or project. “SLO”, as a fashionable expression, has its origins in business practice. From a normative viewpoint, the concept is closely related to social contract theory, and, as such, it has a political dimension. After outlining the contractarian normative background (...) to the SLO, we will show how academic concepts such as legitimacy and stakeholder management have a tendency to provide the intellectual underpinning for the business case for securing an SLO. While business case perspectives on the SLO may well be in line with the use of the term in business practice, we will highlight certain difficulties and ambiguities related to the instrumental use of the expression. In the final section, we briefly introduce the articles of this Special Issue to the reader and explain how they relate to the topic. (shrink)

For more than three decades, Integrative Social Contracts Theory (ISCT) has been lauded as a business ethics theory particularly well suited to the international arena, especially because of its alleged ability to reconcile respect for cultural idiosyncrasies and normative teeth. However, this theory has also faced various objections, many of which its authors have responded to with varying degrees of satisfaction. As a contribution to this debate, this article provides a unifying rationale for many of those objections by exploring their (...) rooting in the Separation thesis. It submits that this fact negatively impacts the theory with three major challenges, namely: significant limitations to correctly frame moral issues and situations; poor identification of hypernorms; and insufficient theoretical grounding of hypernorms. This critique highlights the need for the entanglement of the normative and the empirical in business ethics theorizing. (shrink)

This article explores the moral permissibility of sweatshop boycotts. We build explicitly on Tomhave and Vopat’s (2018) framework for evaluating the moral permissibility of boycotts in general for the specific case of sweatshop labor. We argue that sweatshop boycotts are more likely to be morally justified when targeting forced labor compared to free labor and we explore the relevant moral tradeoffs associated with boycotts of free labor sweatshops. We analyze the morality of three cases of sweatshop boycotts—Indonesia in the 1990s, (...) Bangladesh following the 2013 Rana Plaza disaster, and the Uyghur region in China—and then discuss how insights from these cases might provide a model to guide activists and business ethicists in analyzing the morality of other sweatshop boycotts. (shrink)

An important question in the business ethics literature concerns organizational response in the aftermath of an unethical business practice. This study examines factors affecting firms’ decision to take reparative action in the aftermath of an environmental violation. Specifically, we investigate environmental violators’ decision to undertake a Supplemental Environmental Project (SEP), which is an initiative that promotes restorative justice. To settle an environmental violation, the United States’ environmental regulator allows offenders the option of either paying the full penalty or a reduced (...) sum while spending additional effort and engaging in an environmental project. As predicted, we find that firms with poorer past environmental performance and greater shareholder environmental activism are more likely to engage and invest in a SEP. Additionally, there is a stronger association between shareholder activism and SEP investment when firms have poorer past environmental performance. Our findings inform regulators, stakeholders, and business ethics researchers on the factors that lead firms to undertake reparative action following unethical business practices. (shrink)